The rise of contactless technology is undeniable, with more and more people benefiting from the convenience of this form of payment – so much so that one-third of all card payments are now contactless, according to statistics from UK Finance, and the proportion is rising rapidly.
The figures show that 33% of card payments were contactless in May this year, up from 18% the year previously, with £4.5 billion spent via contactless in the month – up from £3.9 billion in April. This highlights how quickly people are migrating to this form of payment, as can be further seen when looking at annual growth, with contactless payments rising by 148% year-on-year.
The report stated that this is likely to be driving the growth of card use overall, with the number of card payments rising to 1.4 billion in May, up 12% over the year. In value terms, card spending grew at an annual rate of 7%, the highest rate in 15 months – much of this could be due to rising inflation, said the report, but it's notable nonetheless.
However, contactless isn't the only area to see strong growth – online purchases also ramped up, rising by 19% year-on-year, as online shopping increasingly becomes the norm.
"With one in three card payments now contactless, it is clear consumers value the speed and convenience of this way to pay," said Richard Koch, head of Cards at UK Finance. "Card payments continue to grow at a faster pace than spending generally, a trend we predict is going to continue."
The figures follow similar research from the British Retail Consortium (BRC), which revealed that cards have overtaken cash in value terms for the first time on record, firmly establishing their place as the dominant payment method in retail.
The report found that, in 2016, cards accounted for more than 50% of all retail transactions by volume – having long accounted for the majority of retail spending in value terms – and that debit cards overtook cash purchases, another first. It's the first time that cash has failed to be the largest payment category, with the share of debit card transactions growing by 4.5% to account for almost 43% of all retail transactions, while cash transactions saw a 5% drop in market share to account for 42%.
Credit card use is also growing, albeit to a lesser extent than debit cards – additional figures from UK Finance revealed that £40.6 billion was spent using debit cards in May, up 7.1% year-on-year, while credit cards were used for £16.6 billion worth of purchases (up 6.5%). Not only do these figures highlight the growing use of plastic, but they also reiterate the importance of choosing your flexible friend wisely.
Whether you're after a new credit card or want to avoid the possibility of debt by sticking with your trusty debit card, you want a card that works for you, and these days you've got plenty to choose from – with plenty of incentives to boot.
Cashback is a big thing these days. Check out the best current accounts and you'll see that many offer cashback when using your debit card at selected retailers (or in the case of TSB's Classis Plus account, you'll get £5 cashback a month just for making 20 debit card purchases), so you've got a serious opportunity to add to your bank balance.
Cashback credit cards are growing in popularity, too, or you may prefer cards that offer rewards in the form of airmiles or loyalty points. If you're confident you can afford to pay the balance off as soon as the statement arrives, this option could be highly lucrative – indeed, many people now use their credit card as their core method of spending and use their earnings to repay it each month, largely due to the wide range of rewards that can be earned with such cards. Just make sure you really can pay it off, otherwise interest could start to rack up.
Alternatively, if you've got a big purchase in mind, you may be after a 0% purchase credit card. This allows you to spread the cost without needing to worry about interest, letting you pay it off in manageable monthly instalments – and with terms of up to 32 months available (such as from AA's Dual Credit Card MasterCard), you've got plenty of time to repay.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.